Lazer Vision Corporation has two product lines: LED televisions and LCD televisions. The company has budgeted the following production and overhead costs for the upcoming year: LED TV’s LCD TV’s Units Produced 1,500 2,250 Direct labor hours per Unit 20 30 Material Moves per Product Line 15 25 Budgeted Materials Handling Cost $75,000 Total Machine Hours 10,000 16,000 Machine Maintenance Costs $180,000 Refer to Lazer Vision Corporation. If the company uses total direct labor hours to allocate factory overhead, the materials handing cost allocated to LED TVs would be: Select one: a. $23,077 b. $28,125 c. $45,000 d. $30,000
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Lazer Vision Corporation has two product lines: LED televisions and LCD televisions. The company has budgeted the following production and overhead costs for the upcoming year:
| LED TV’s | LCD TV’s | ||
|---|---|---|---|
| Units Produced | 1,500 | 2,250 | |
| Direct labor hours per Unit | 20 | 30 | |
| Material Moves per Product Line | 15 | 25 | |
| Budgeted Materials Handling Cost | $75,000 | ||
| Total Machine Hours | 10,000 | 16,000 | |
| Machine Maintenance Costs | $180,000 |
Refer to Lazer Vision Corporation. If the company uses total direct labor hours to allocate factory overhead, the materials handing cost allocated to LED TVs would be:
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